Rapid7(RPD) - 2024 Q4 - Annual Results

Financial Performance - Annualized recurring revenue (ARR) reached $840 million, a 4% increase year-over-year[4] - Full-year revenue totaled $844 million, up 9% year-over-year, with product subscriptions revenue at $809 million, also up 9%[4] - Free cash flow for the year was $154 million, compared to $84 million in the previous year, marking an 83% increase[5] - Non-GAAP income from operations for the full year was $163.5 million, significantly up from $102.2 million in the prior year[5] - Total revenue for Q4 2024 was $216.3 million, a 5.8% increase from $205.3 million in Q4 2023[38] - Product subscriptions revenue reached $206.3 million, up from $194.8 million year-over-year, representing a 5.7% growth[38] - Net income for Q4 2024 was $2.2 million, a decrease from $19.1 million in Q4 2023, indicating challenges in profitability[38] - The company reported a total gross profit of $150.4 million for Q4 2024, compared to $145.4 million in Q4 2023, showing a slight improvement[38] - Operating expenses for the year decreased to $557.9 million from $629.9 million in the previous year, indicating cost management efforts[38] - For the year ended December 31, 2024, GAAP net income was $25.526 million, a significant improvement from a loss of $152.815 million in 2023[47] - Adjusted EBITDA for the year ended December 31, 2024, was $188.450 million, up from $126.661 million in 2023, reflecting a growth of approximately 48.8%[47] Customer Growth - The number of customers increased to 11,727, representing a 2% growth from the previous year[3] - The number of customers with active recurring revenue contracts increased, contributing to the annual recurring revenue (ARR) metric[32] Future Projections - The company anticipates ARR for Q1 2025 to be between $870 million and $890 million, reflecting a year-over-year growth of 4% to 6%[8] - Revenue guidance for full-year 2025 is projected to be between $860 million and $870 million, indicating a growth of 2% to 3%[8] - Anticipated non-GAAP net income for full-year 2025 is projected to be between $127 million and $137 million, with diluted non-GAAP net income per share expected to be between $1.72 and $1.85[50] - The company expects a GAAP net loss for the first quarter of 2025 to be between $11 million and $9 million, with anticipated stock-based compensation expense of $28 million[50] - The anticipated free cash flow for full-year 2025 is projected to be $135 million[51] Cash Flow and Liquidity - Net cash provided by operating activities for the year ended December 31, 2024, was $171,670,000, an increase of 64.5% compared to $104,278,000 in 2023[41] - Cash, cash equivalents, and restricted cash at the end of Q4 2024 totaled $342,101,000, up from $214,127,000 at the end of Q4 2023, marking a 59.8% increase[42] - Total cash used in investing activities for the year ended December 31, 2024, was $(46,522,000), a significant improvement from $(178,754,000) in 2023[41] - The company experienced a net increase in cash of $111,993,000 in Q4 2024, compared to an increase of $30,912,000 in Q4 2023, representing a growth of 262.5%[41] Stock-Based Compensation - Stock-based compensation expense for Q4 2024 was $27,412,000, up from $24,177,000 in Q4 2023, reflecting a rise of 9.1%[44] - Stock-based compensation expense for the year ended December 31, 2024, was $107.961 million, slightly down from $111.636 million in 2023[47] Operational Developments - Rapid7's Managed Extended Detection & Response expanded to include Microsoft security telemetry, enhancing threat detection capabilities[7] - The company achieved the In Process Designation from FedRAMP for its InsightGovCloud Platform, indicating progress towards federal authorization[11] - Rapid7 won "Security Vendor of the Year" at the CRN Channel Awards 2024, recognizing its contributions to the IT channel[7] Financial Position - Total assets increased to $1.65 billion as of December 31, 2024, compared to $1.51 billion in 2023, reflecting growth in the company's financial position[36] - Non-GAAP gross profit for Q4 2024 was $157,902,000, up from $152,265,000 in Q4 2023, reflecting a growth of 3.4%[44] - Non-GAAP gross margin for Q4 2024 was 73.0%, slightly down from 74.2% in Q4 2023[44] - The company reported a GAAP loss from operations of $35,035,000 for the year ended December 31, 2024, compared to a loss of $84,288,000 in 2023, showing a reduction of 58.3%[44] Corrections and Adjustments - An immaterial correction resulted in an increase of approximately $3.6 million in additional paid-in capital as of December 31, 2023, without affecting net cash provided by operating activities[52]